Owners’ associations (OA) have been in a somewhat tricky position since the introduction of value added tax (VAT) in the UAE in January. The exact rules and regulations remain unclear and at the heart of this confusion lies the simple question of whether OAs are tax exempt or not. The catch 22 position revolves around whether OAs are deemed taxable entities or whether they fall outside of this domain, like many service providers, such as schools. If an OA fails to register it may be hit with a Dh20,000 fine for non-registration. However, if it undertakes to pay VAT but are subsequently judged to be exempt, it has to go about trying to recover paid taxes.